Why Are Video Games So Expensive? (Top 10 Reasons)

As you peruse the shelves of the gaming section of your local retailer you can see the various costs of video games, and the games under the glass costing anything between $40 and $100.

The cost of video games is more complicated when the same game is available in gold, silver and platinum editions all with different prices making you wonder.

Why is it that video games are so expensive?

 

30 seconds for 0 seconds. 0 100 %

Why Are Video Games So Expensive? (Top 10 Reasons)

The most important reason the video games are costly is the budget.

The budget covers the costs in research and development as well as the costs of running a business and retaining skilled employees to develop games as well as distribution and marketing the cost of game maintenance, as well as royalties.

Prices for video games can affect the price of video games due to external influences like the price a customer is willing to pay, as well as the market landscape for the used market for video games.


1. Budget

When a game for video is first designed and cleared to develop, it’s typically given a budget that includes all the expenses required for the product to go to market.

These include physical resource, work resources, as well as any other resources the game may require.

In evaluating the budget for an online game developer will calculate the likely and potential revenues of the game, then compare this to the estimated cost of bringing the game on the market and then decide on a suitable price that balances profits and cost.

The current average cost of a brand new video game is around $60. game designers use this figure as a basis to determine how the budget will go and the amount of budget they can manage at this point in time.


2. Research And Development

Research and development, also known as R&D is the method of creating an concept for a video game, and then bringing the idea to life.

The price of R&D has increased dramatically since the first surge in the home video game consoles like Nintendo as well as PlayStation.

The year 1996 was the median R&D cost was lower than $1 million. Today, the price can easily be the $10-, $20- and even $30 million.

A major reason for the rising costs for R&D is the huge capabilities modern gaming consoles provide.

With consoles capable of handling 128 bits and enable top of the line graphics rendering and development, the process of creating and programming games on these consoles is much more difficult.


3. Company Overhead

The image alt=”Chalk drawing of a loading progress bar, including overhead for inscription.” src=”https://www.thetechwire.com/wp-content/uploads/2022/03/Chalk-drawing-of-loading-progress-bar-with-inscription-overhead-costs..jpeg”/>

Cost of overhead for companies affects the cost of video games in the current market, too.

This covers the cost of leasing the space in which the game is created in addition to the cost to power the facility, as well as an insurance premium.

Additionally, overhead includes non-tangible costs , such as the expense for protecting the intellectual property as well as getting patents.

The costs of financial advisors and legal counsel should also be included in the cost.

All these overhead expenses have to be included in the cost of items that are ultimately sold to the buyer.


4. Cost Of Employment

Video games are extremely complex to create and requires skilled developers and other technical employees.

The cost for an entry-level coder is about $120,000 annually.

Include in this the necessity of an entire team of coders are needed along with an entire team of managers, developers quality control specialists as well as many other experts to make a game a its finalization The cost of working becomes a major element in the price of video games.


5. Marketing And Distribution

If a video game development firm believes they have created a successful video game, then the game has to be advertised to the general public to spread the word and create excitement surrounding the game.

The marketing budget could be huge with commercials that can reach as high as one million dollars in a 30-second spot.

Additionally the product has to be made available to retailers that will then sell the product to the consumer.

This price covers the cost of transportation, storage along with distribution.


6. Royalties

If a game uses the services of a well-known actor or product, it is usually royalty payments that need to be paid to the company who provided their voice, appearance as well as the product or voice to the game’s company.

Again, the royalty payment are bundled into the final cost of the game.


7. Maintenance

The most important budgetary consideration that influences the price of a video game’s maintenance.

All trustworthy video game companies offer user support of a certain kind to players who face difficulties in the operation of the game.

If any glitches or bugs are discovered following the release, a development team will be working to release an update to the game.

This ongoing support costs money.

Another reason is the addition of updates to the game.

For some updates, the user must pay a fee for access to certain sections of the update. However, the majority of updates are no cost so that they can keep playing the game, or to encourage new players to buy the game.


8. Value Per Dollar

In analyzing the cost for video game, game producers will claim that, when viewed with a neutral lens the cost of an online game is fairly reasonable, even affordable If you take the time to study the game.

The number of games played and all the technology used in the game is equivalent to a high price-per-dollar.

Take, for instance, all budgetary aspects outlined in the preceding section.

Given the enormous budgets needed to create and launch an game, a producer may find reasons to increase the amount they pay to play a video.

Another reason for the expensive price a game developer might argue for would be the fact that the amount of hours of game playtime that the client gets more than covers the pricey video games.

A customer, for instance, could pay $15 to a two-hour film for a total of $7.50 for an hour of pleasure.

On the other hand, a player could pay just $60 for a game that gives up to 120 hours of gameplay. They you only have to cost $0.50 for each hour.


9. Market Acceptance

Another element that influences the price game is the market acceptance.

Simply put, the sales market for games has become used to games that are with prices in the $60 range and consumers are much more willing to shell out the price for the game.

If the players was able to decide as a unit at some point to refuse this price and cease buying games for that price the price of games on the internet would fall.

However, this is not the reality, and a cost at $60 can be considered to be normal and acceptable in the marketplace.


10. Resale

Although it might not stand out as the main reason for expensive video games, resales do influence the cost of the latest video games.

With a variety of retailers including Game Stop, Best Buy, Walmart, eBay, and Amazon selling resales of video games, game makers make the argument that reselling of a game eliminates the possibility of selling an original game.

As a result, fewer new games are sold than if resales were not offered.

If fewer games could be sold, every game sold has to be able to make up the lost of profit on games that were not bought by an online retailer instead.


Is $60 Too Much To Pay For A Video Game?

It’s not enough to spend on the game you play on video.

The cost of a game divided by the amount of resources devoted to the creation, distribution and upkeep for the games, in addition to the potential hours of entertainment that the game can provide to the player, a price of the price of $60 for a game is quite reasonable.

Another thing to consider is how slow the cost of video games that are new has increased over the past few years.

The prices for video games aren’t in line with the general inflation rate and have been an average price of about $60 from the early 1990s.


Are Video Games Now $70?

A few video games are available with prices starting at $70 however it’s unlikely that it will become the standard for the industry anytime soon.

With the launch on the PlayStation 5 and the Microsoft Xbox Series X Some AAA game makers have started to launch their latest games instead of the normal $60.

The AAA gaming companies point to the enormous amount of cash that goes into the development of their products as the main reason for the price increase and highlight the substantial absence of price increases over the past couple of decades as a factor in the price hike.

They’re basically saying it’s the right time to start the price hike for AAA games.

The games that are currently on sale at 70 dollars include NBA 2K21, Call of Duty: Black Ops Cold War, Demon’s Souls, Godfall along with MLB The Show 21.

Another expense that could be added to the cost of video games is upgrade and extra editions.

Certain game designers use the base price of $65 as the cost of the game base and offer various editions at an additional charge.

For instance, Assassin’s Creed: Valhallawas released as a standard edition at $60.

The creator, Ubisoft, also released three different versions of the game The Gold edition, the Ultimate and the Limited Edition Collector’s Edition.

In-game purchases are fast becoming the highest-paying part of the video game business.

Following the initial purchase of the game, developers can offer additional game modes or other access features like battle passes, additional characters, as well as upgrades to their character at an additional cost via the game itself.

This model of business allows for rapid deployment of revenue-generating products, without the expenses of creating a brand new game from scratch.


Why Are Retro Video Games So Expensive?

The COVID 19 pandemic has altered not just the technological and social national landscape, but also the video game sales landscape too.

The retro games that are believed to be games made available on consoles prior to PlayStation 4 and Xbox One have seen major leaps in cost.

a site that tracks the cost of every video game, card and comics, from their the time of release until today carried out a research study that discovered that the average price of retro video games has increased by 33% from the start of lockdown from March of 2020 through March 2021. Nintendo GameCube games taking the top spot with the average of a 70% increase in cost for games.

Some of the possible reasons for this dramatic growth in the appeal of old-fashioned games in the midst of the pandemic are the factor of nostalgia and the fact that people are at home seeking out new activities to do, and seeking new ways to earn money, even though traditional methods aren’t enough.

The nostalgia may be due to this fact: the generations of kids who were raised with retro gaming consoles is now an adult who have disposable earnings.

They may also want to remember a small part of their childhood by going back to the games on video that they played as children.

Generations younger than them who have been confined to their homes due to the lockdowns triggered by the pandemic could explore new forms of entertainment, including old-fashioned gaming consoles.

The simpler gameplay of retro consoles, particularly for younger gamers, is an innovative method of technology that the current generation, which has been raised in a world of advanced technology, hasn’t seen before.

Also, with a huge part of the population working but unemployed due to the epidemic and the need to find different ways to earn money.

Platforms like eBay let sellers offer items like retro games to customers.

When the popularity of retro games increased as resellers learned that reselling retro video games is a lucrative business and began looking for games to purchase and then resell with a substantial markup, which resulted in an increase in prices of games from the past.


What Is The Most Expensive Video Game Ever Made?

The winner to the is currently taken by Destiny whi ch is an not released video game Bungi. Bungi in collaboration with Activision.

Destiny came out launched in 2014 with the estimated cost of $500m which is more than twice as much than the second most expensive video game ever created, Grand Theft Auto V which cost $265 million.

Close behind Grand Theft Auto V are Call of Duty: Modern Warfare 2 with a price tag of 200 million dollars, Star Wars: The Old Republic with a price of 200 million dollars, Final Fantasy IV at $145 million along with Max Payne 3 at $105 million.


What Is The Most Expensive Video Game Ever Sold?

A sealed version Super Mario Bros. which was purchased by an anonymous investor on the 6th of August 2021, at an insane cost of $2 million.

Between 2020 and 2021 this title for the highest-priced games ever played was traded five times before settling on the current winner.

The price war started July of 2020, when an original copy of Super Mario Bros. with an intact cardboard hanger, and graded 9.4 A+ in the Wata scale, was purchased at $114,000.

This sale was not able to last many years, however with Super Mario Bros. 3 making headlines and selling for $156,000 by the month of November in 2020.

The particular Super Mario 3 was accompanied by an 9.2 A+ Wata rating and a uncommon box in which Mario’s hand is obscured from view by Bros. on the front cover.

Super Mario 3 was the winner for five solid months, before it was smashed by a second copy from Super Mario Bros. in April of 2021. It had an 9.6 A+ score as well as cardboard tabs.

The copy was sold for $660,000.

The quality that Super Mario was evident. Super Mario was not as evident with an unproven competitor in the competition, The Legend of Zelda, that was purchased for $870,000 on the 9th of July 2021.

The game was regarded as an absolute rarity due to it being a sealed , pristine copy, as well as an alternative to the game which was made available in the year 1987.

Zelda’s time in the series was extremely brief However, Mario returning to the top spot just three days later on the 11th of July, 2021.

The Mario game is Super Mario 64 and was sold at auction for an astounding $1.56 million during auction.

Super Mario 64was believed to be an innovative game due to its innovative polished 3D platform that was extremely advanced in its day and thought of as one of the first games in 3D gaming. 3D space.

Furthermore, the game was in excellent condition and scored 9.8 out of 9.8plus by Wata the company that rates video games.


What Are AAA Games?

Triple A or AAA is a name used within the gaming industry that indicates the high-profile and expensive game, usually launched by a major company in the game industry.

are usually blockbuster franchises that are built on the success of other games from the same franchise.

The games are the standard for price and are generally launched at a price of $60. level.

Triple-A games also benefit of having a huge team that can support the creation and production of games.

This allows games that provide massive games with huge game-play and modern graphics and gaming.

The most notable examples that are AAA game titles are Mass Effect, Call of Duty, Halo, Battlefield, FIFA, Madden NFL, World of Warcraft, and Star Wars: The Old Republic.


References:

How Much Money Goes Into Video Game Development and Why? (Hint: A Lot !). 25 Sept. 2020,

“Is Your ‘Mario’ Worth Millions? A Recent Timeline of Games That Sold for Not-So-Small Fortunes.” Collider, 13 Aug. 2021,

Ltd, Arm. “What Are AAA Games?” Arm | The Architecture for the Digital World, ¬†Accessed 11 Mar. 2022.

“Revealed!! Why Video Games Are So Expensive.” The Checkout Presented by Ben’s Bargains, 13 June 2013,

Add a Comment

Your email address will not be published.